The anticipated reopening of the Strait of Hormuz on Friday following the U.S.-Iran interim peace agreement is expected to release millions of barrels of stranded crude oil into global markets, raising pressure on Middle Eastern oil prices.
Industry analysts estimate that more than 90 million barrels of non-Iranian crude currently trapped in the Persian Gulf could re-enter supply chains, while a further 70 million barrels of Iranian oil stored on tankers may become available if sanctions restrictions are eased.
The supply surge follows weeks of export disruptions caused by the conflict, prompting Gulf producers to rely on alternative shipping routes and ship-to-ship transfers off the coasts of the United Arab Emirates and Oman.
Ship-tracking data showed dozens of supertankers carrying roughly 87 million barrels of crude remained stranded inside the Gulf as of Thursday, with Iranian exporters already beginning to move cargoes through the waterway.
Despite the prospect of increased supply, demand from Asia is expected to remain subdued in the near term as refiners have largely secured crude cargoes for June through August and several Chinese plants prepare for maintenance shutdowns.
Market participants said crude sellers may need to offer deeper discounts to attract buyers, particularly as refining margins across Asia are expected to weaken in the second half of the year.
Refiners in major importing nations including India, Taiwan and South Korea are nonetheless preparing for a return of larger Middle Eastern supplies, which could reduce their dependence on crude imports from the Americas.
Indian refiners are expected to gradually increase purchases of Gulf crude under existing term contracts, while Taiwan’s CPC has indicated readiness to process heavier Middle Eastern grades if shipping routes normalize.
Traders said the return of abundant Gulf supply could deepen contango in regional oil benchmarks, reflecting expectations of more comfortable inventories and weaker prompt demand.
The reopening of the strategic waterway marks a significant shift for global energy markets, with increased exports from the Middle East likely to reshape trade flows and weigh on crude prices in the coming months.